2015 (11) TMI 1784

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....t having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in levying penalty u/s. 271(1)(c) and that too @300% in respect of the income of Rs. 4,95,000/-, more so when appellant was entitled to immunity under Explanation 5 to section 271(1)(c) or Income Tax Act, 1961. 2. That in any case and in any view of the matter, action of Ld. CIT(A) in confirming the action of Ld. AO in levying the penalty u/s. 271(1)(c) and that too @ 300% is bad in law and against the facts and circumstances of the case. 3. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in levying penalty u/s. 2....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....onfirming the addition and proceeded to levy of penalty u/s. 271(1)(c) of the Act on account of issue of addition of Rs. 4,95,000/- made on account of purchase of demand drafts and Rs. 15,50,000/- on account of unaccounted cash. During the course of assessment proceedings, the assessee preferred to offer the amount of Rs. 4,95,000/- for taxation in his hand subject to no penal inferences which were not accepted by the A.O. 3. During the course of search of locker No. 152 maintained with State Bank of India, Rewari in the joint names of assessee and his wife, cash amount of Rs. 15,50,000/- was found and seized. However, the assessee failed to explain the source of cash in question found in the locker despite availing several opportunities, ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... principle of law that penalty proceedings as well as assessment proceedings are to be decided independently and the penalty proceedings are not to be influenced by the assessment proceedings in any manner whatsoever. Undisputedly, on the basis of search and seizure operation on 24.08.2006 at the hospital cum residence of the assessee, documents/bank slips dated 14.06.2004 showing purchase of demand drafts to the tune of Rs. 4,95,000/- and unaccounted cash of Rs. 15,50,000/- were seized from the locker maintained with SBI, Rewari in the joint name of the assessee and his wife, the seized and unaccounted income of Rs. 20,45,000/- (Rs. 4,95,000+15,50,000) has been assessed during the assessment year 2007-08 vide assessment order dated 19.12.2....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... the penalty proceedings being independent one, he cannot be estopped merely by virtue of the fact that he himself has surrendered the unaccounted income in his income tax return, because the assessee claimed to have surrendered the amount of Rs. 4,95,000/- to buy peace of mind and to avoid the protracted litigation; Second, when the revenue has statutory power to proceed against the assessee by reopening the assessment of a particular assessment year and then initiating the penalty proceedings, it cannot be allowed to proceed mechanically to invoke the penal provisions. So initiating the penalty proceedings on the basis of void assessment order are not sustainable in the eyes of law. Assessee is well within his right to take this defence o....